Question
6. Suppose that the following information represents the complete trade data for each country. Exports ($) Imports ($) Country A Good X Good Y Good
6. Suppose that the following information represents the complete trade data for each country.
Exports ($) | Imports ($) | |
Country A Good X Good Y Good Z | 8,000 12,000 10,000 | 4,000 5,000 0 |
Country B Good R Good S Good T | 0 1,900 1,600 | 7,000 9,000 3,000 |
Country C Good M Good N Good O | 8,000 5,000 5,400 | 3,400 2,500 2,800 |
(a) Calculate the intra-industry trade index for each commodity category in each country.
(b) Calculate the intra-industry trade index for total trade in each country.
(c) Use trade theory to explain the usefulness of these indices in determining each countrys trade patterns.
Note: You may use either the Balassa index or the Grubel-Lloyd index for your calculations.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started